Cryptocurrencies And The World Financial System

Many have been dismissing Cryptocurrencies as an alternative to fiat currency that will simply fade into the ether after a few more months, another phase within the globalized world similar to cake pops or the return of shoulder pads. However, the multitude of events ranging from cases with the SEC in the United States through to the demand for crypto startups in Malta and Gibraltar suggest otherwise. In fact, analysts have found compelling evidence to suggest that the days of shares dominating the stock markets are out and instead it’s now the age of the ICO token.

An Uproar In The Markets

Interestingly, even though many investment gurus initially denounced Cryptocurrencies within the early days since it hit the world, but they have managed to carve out a respectable following. At present, it is becoming clearer that the number of crypto whales is steadily increasing and so too, is the opinion that Cryptocurrency-based assets will also rise within the financial markets. During the last few weeks of 2017, the price of Bitcoin spiraled upwards, leading to a massive hike in value of more than 2 000%.

Yet, Bitcoin stands alone in its feat of surpassing $10 000 market price on the crypto exchanges, but all other tokens have also done very well. Analysts have pointed that the one feature that undoubtedly makes Cryptocurrencies far more profitable than ordinary assets such as stocks, comes down to the fact that crypto markets are dynamic. The constant evolution of the crypto market due to the free-flowing market forces ensures that Cryptocurrencies really are anybody’s game. Furthermore, the current minimal presence of outside control ensures that the market price for each and every token will surely rise as time marches forward.

Impact on investment

Hence, one comes to the point of this article, investors around the globe have noticed the unique opportunities afforded to them in the age of Cryptocurrencies and many of them have begun to seek out crypto-based assets. The investors have included cryptocurrencies as an additional keg within their arsenal of assets. The introduction of Cryptocurrencies to the world have arguably had positive ramifications such as being one of the few effective mechanisms to safeguard individuals from risk.

While this all may be true, there are still some analysts who are worried that if anything significantly negative were to occur within the Cryptocurrency market, what the ramifications would be for the rest of the financial world. All organizations who currently own various Cryptocurrencies will significantly impact the stock market should anything negative happen to the Cryptocurrency tokens that the organizations own.

Obviously this is a huge cause for concern, however, it must be pointed out that the total number of tokens within existence for crypto markets pales against the number of shares in major companies such as Microsoft. Therefore, the estimated consequences of a crypto crash are far less serious than a second crash of traditional financial instrument.

Final Thoughts On The Topic

Currently, it seems that the tide is turning as most investors are assuaged with the opinion that Cryptocurrencies will work as an additive to the current system and not a replacement. All the while, blockchain technology, the engine powering the forward momentum of Cryptocurrencies is continuing to pick up allies the world over.